Tax Save Card Registration

All residents of Korea are eligible for a tax credit for purchases paid in cash. To get the tax credit, you must have registered yourself on the National Tax Service (NTS) Cash Receipt System, known in Korean as (현금영수증 hyeon-geum yeong-soo-jeung). The Cash Receipt System began in 2005 as one of a series of initivatives by the government to create a more transparent tax system by tracking cash purchases. Although initially the system only applied to cash purchases of W5000 or over, as of 2008 it applies to all cash purchases - no minimum amount.

The Cash Receipt System is a program through which cash purchases are tracked by a customer presenting a membership card (Tax Save Card) or a cell phone number, as opposed to getting a regular receipt. When this cash receipt information is entered after a cash purchase, the information is sent straight to the National Tax Service.

BENEFITS
While it's true that the Cash Receipt System tracks cash purchases, thus giving the the tax service a increasingly accurate idea of one's income, there are some definite advantages to the system. As a taxpayer you can receive a deduction on your year-end tax settlement of up to 5 million won depending on the amount you've spent in cash purchases. The deduction works out to 20% of the total cash you've spent that exceeds 20% of the yearly income you have reported. (For businesses, it's a 1% rate). The total of the cash purchases can be those made by the taxpayer and/or the taxpayer's dependent(s).

You can also claim your rent payments on the Cash Receipt System. To do so, you have to go down to the tax office, with your valid lease agreement, and tell them you would like to claim your rent payments on the cash receipt system. The payments will then be recorded in the system automatically each month until the end of the lease period.

CASH RECEIPT SYSTEM REGISTRATION PROCESS
There is an online registration system on the Cash Receipt NTS website. Note that the site is in Korean only and that it is best accessed using Internet Explorer). To register you will enter your alien registration number and go through a real-name check process. If you are already registered as a taxpayer then your name and alien registration number, as printed on your alien registration card, should already be accurately entered into the system.

If you hit a snag and your ARC number is not recognised by the online verification program, here is what you can do. The reason for the problem may be that your employer did not register your name and ID number at the tax office. This does not mean your taxes have not been paid. You can register yourself by visiting your district tax office ((세무소/sae-mu-so). (For more information on the NTS and tax offices, see the K4E information page - Services for Foreign Taxpayers.) You should be able to complete the online registration process after 4-5 days (or you can see about registering at the tax office).
Another reason the system didn't recognise you may be that there is a slight difference in the way you spelled your name and the way in which your employer registered it or in the way it appears on your ARC. If that's the issue, you can telephone your local tax office and explain the situation. They will likely ask you to fax them a copy of your ARC. Once that's done, you can continue registering online. The registration process generally takes about 10-15 minutes if all goes well.

NTS HELP LINE
If you're having problems registering or have questions about the Cash Receipt System, you can always contact the National Tax Service Helpline at 1588-0560 or try the Seoul Regional Tax office at 02-2076-5711 or visit your local Global Village Center.
You can also post your question online via the NTS Foreign taxpayer advocate service

TAX SAVE CARD
Once you've completed the online registration process, a Cash Receipt (Tax Save) card will be sent to your home address. You can then show the card whenever you pay cash and the purchase will be electronically recorded by the NTS.

K4E Note: We do our best at K4E to ensure that the information we provide is accurate and up-to-date. Should you note any errors or ommissions, please let us know at info@korea4expats.com.